Executive Briefings

Benchmark Report Reveals Decreasing DC Costs

Supply chains are finding greater savings today from distribution improvement efforts, according to the Supply Chain Consortium's survey of top retail- and manufacturing-related companies.

The Core Benchmarks Report notes that distribution center costs as a percentage of revenue are trending downward as compared to last year. "Companies have put a lot of effort into cost savings," says Bruce Tompkins, executive director of the consortium and author of the report. "And with supply chain costs and transportation costs increasing, distribution is an area where companies are able to alleviate some of the financial strain."

The data for the report also shows that there is a higher degree of variability in DC costs as a percentage of revenue than with transportation costs, which indicates that some companies are increasing the costs of distribution in order to significantly reduce transportation costs and improve customer service. However, in general, DC costs are decreasing and many companies are focused on strategies to improve DC productivity.

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Supply chains are finding greater savings today from distribution improvement efforts, according to the Supply Chain Consortium's survey of top retail- and manufacturing-related companies.

The Core Benchmarks Report notes that distribution center costs as a percentage of revenue are trending downward as compared to last year. "Companies have put a lot of effort into cost savings," says Bruce Tompkins, executive director of the consortium and author of the report. "And with supply chain costs and transportation costs increasing, distribution is an area where companies are able to alleviate some of the financial strain."

The data for the report also shows that there is a higher degree of variability in DC costs as a percentage of revenue than with transportation costs, which indicates that some companies are increasing the costs of distribution in order to significantly reduce transportation costs and improve customer service. However, in general, DC costs are decreasing and many companies are focused on strategies to improve DC productivity.

Read Full Article